GM to pay closing dealers about $600 million
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GM to pay closing dealers about $600 million
http://www.detnews.com/article/20090722/AUTO01/907220398/1148/GM-to-pay-closing-dealers-about-$600-million
Washington -- General Motors Co. said it will make cash payments of nearly $600 million to the more than 1,300 dealers it plans to close by the end of next year.
Mike Robinson, GM's general counsel for North American operations, told the House Judiciary Committee's subcommittee on commercial and administrative law that GM had begun making the payments on Monday.
"GM is providing, in aggregate, nearly $600 million in available assistance ... with the first installments paid to affected dealers just this Monday," Robinson said in prepared remarks. "With respect to GM dealers, we simply cannot undergo this sweeping transformation without a comparable effort to reshape our retail network -- one which was largely created in the '50s and '60s."
GM had confirmed previously that it was offering wind-down payments of up to $1 million per dealer.
Chrysler Group LLC attorney Kevyn Orr said in his testimony that the company has helped 439 displaced dealership workers find jobs at 239 dealers.
Chrysler closed 789 -- or one-quarter -- of its dealerships on June 9. It did not offer its closing dealers any wind-down payments or offer any appeal process.
GM, by contrast, is giving its dealers until late 2010 to close and heard about 1,000 appeals. GM agreed to reverse its closing decisions in about 70 instances.
GM expects another 1,250 dealers will voluntary close their doors by the end of next year -- on top of the 1,300 dealers that have received closing notices. All but about 40 dealers have signed the wind-down agreements. By the end of next year, GM plans to have between 3,500 and 3,800 dealers, down from about 6,100 this year. GM's lead bankruptcy attorney, Harvey Miller, is also testifying.
Congress is considering several bills trying to stop the closing of GM dealers and force the reopening of the Chrysler dealers. The House last week approved a spending bill that includes a provision seeking to reverse the dealer closings.
A stand-alone House bill has 258 cosponsors -- a majority -- while a Senate version has 28 supporters.
But Sen. Majority Leader Harry Reid, D-Nev., has said he isn't eager to bring up the bill.
Mike Robinson, GM's general counsel for North American operations, told the House Judiciary Committee's subcommittee on commercial and administrative law that GM had begun making the payments on Monday.
"GM is providing, in aggregate, nearly $600 million in available assistance ... with the first installments paid to affected dealers just this Monday," Robinson said in prepared remarks. "With respect to GM dealers, we simply cannot undergo this sweeping transformation without a comparable effort to reshape our retail network -- one which was largely created in the '50s and '60s."
GM had confirmed previously that it was offering wind-down payments of up to $1 million per dealer.
Chrysler Group LLC attorney Kevyn Orr said in his testimony that the company has helped 439 displaced dealership workers find jobs at 239 dealers.
Chrysler closed 789 -- or one-quarter -- of its dealerships on June 9. It did not offer its closing dealers any wind-down payments or offer any appeal process.
GM, by contrast, is giving its dealers until late 2010 to close and heard about 1,000 appeals. GM agreed to reverse its closing decisions in about 70 instances.
GM expects another 1,250 dealers will voluntary close their doors by the end of next year -- on top of the 1,300 dealers that have received closing notices. All but about 40 dealers have signed the wind-down agreements. By the end of next year, GM plans to have between 3,500 and 3,800 dealers, down from about 6,100 this year. GM's lead bankruptcy attorney, Harvey Miller, is also testifying.
Congress is considering several bills trying to stop the closing of GM dealers and force the reopening of the Chrysler dealers. The House last week approved a spending bill that includes a provision seeking to reverse the dealer closings.
A stand-alone House bill has 258 cosponsors -- a majority -- while a Senate version has 28 supporters.
But Sen. Majority Leader Harry Reid, D-Nev., has said he isn't eager to bring up the bill.
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